The Zonyo Company on October 1, 2008, sold article "A" for P4,000, costing P2,700. Article "B", a used article was accepted as down payment and the balance on a monthly installment payment of P220 starting November 1, 2008. P1,200 was allowed on the article traded-in. The company estimates reconditioning cost of P80 on this article and a sales price of P1,100 after such reconditioning. The company normally expect 20% gross profit on sale of used articles. The company employs the perpetual method of inventory. On April 1, 2009, the customer defaulted in the payment of installment. Article "A" which was sold was repossessed; its value to the seller is P1,350 allowing for reconditioning cost and a normal gross profit on resale. The amount of realized gross profit in 2008 is:

The Zonyo Company on October 1, 2008, sold article "A" for P4,000, costing P2,700. Article "B", a used article was accepted as down payment and the balance on a monthly installment payment of P220 starting November 1, 2008. P1,200 was allowed on the article traded-in. The company estimates reconditioning cost of P80 on this article and a sales price of P1,100 after such reconditioning. The company normally expect 20% gross profit on sale of used articles. The company employs the perpetual method of inventory. On April 1, 2009, the customer defaulted in the payment of installment. Article "A" which was sold was repossessed; its value to the seller is P1,350 allowing for reconditioning cost and a normal gross profit on resale. The amount of realized gross profit in 2008 is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The Zonyo Company on October 1, 2008,
sold article "A" for P4,000, costing P2,700.
Article "B", a used article was accepted as
down payment and the balance on a monthly
installment payment of P220 starting
November 1, 2008. P1,200 was allowed on
the article traded-in. The company estimates
reconditioning cost of P80 on this article and
a sales price of P1,100 after such
reconditioning. The company normally
expect 20% gross profit on sale of used
articles. The company employs the perpetual
method of inventory.
On April 1, 2009, the customer defaulted in
the payment of installment. Article “A" which
was sold was repossessed; its value to the
seller is P1,350 allowing for reconditioning
cost and a normal gross profit on resale.
The amount of realized gross profit in 2008
is:

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